In a decision in January, the Danish Electricity Supply Authority ruled that six district heating companies, which had lost a combined DKK 44.6 million by speculating on electricity prices in the period 2018-2021 through the collapsed company Dansk Kraftvarme Kapacitet, were not allowed to recover the losses through higher prices for district heating, as this is in violation of the Heat Supply Act.
Therefore, the affected district heating companies; Oksbøl Varmeværk, Sdr. Herreds Kraftvarmeværk, Snedsted Varmeværk, Vildbjerg Varmeværk, Veddum-Skelund-Visborg Kraftvarmeværk and Hirtshals Fjernvarme had to pay over DKK 30 million back to their customers, which had previously been claimed.
The decision now sends the latter into a reconstruction to avoid bankruptcy. This is stated by Hirtshals Fjernvarme, which supplies the majority of the citizens of Hirtshals, in a press release. The company is consumer-owned and therefore does not have significant equity, as income and costs associated with operations regulate the price of heat.
Financing proposal rejected
The district heating company otherwise believed that it had entered into "an advantageous settlement, which we had the opportunity to fulfill by using the profit from the sale of free electricity CO2 quotas to pay the ongoing installments on the settlement."
However, that financing solution has been rejected by the Danish Utilities Authority, and Hirtshals District Heating cannot therefore fulfill its obligations in the settlement.
"The board of directors has therefore chosen to submit a request for reconstruction in the interest of consumers. The purpose of the reconstruction is to achieve peace of mind so that we can find a solution that ensures healthy operations in Hirtshals District Heating, and at the same time creates security for consumers about future heat deliveries. We are absolutely certain that we will succeed in this," it says in the press release, which is signed by chairman of the board Børge Vinther-Jensen.
Hirtshals Fjernvarme states that customers will not notice the reconstruction, as "the supply of heat will continue as before, and that the management and board, together with the reconstructor, will operate Hirtshals Fjernvarme."
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